Bill May End Price Controls On Tickets

By MELODY PETERSEN

Published: March 10, 1997

TRENTON, March 6—
Even though New Jersey is still in the midst of an 18-month experiment in letting ticket brokers charge concertgoers and sports fans as much as they can, a bill is close to passage in the State Legislature that would make the arrangement permanent.

It is unclear, however, whether fans are helped or hurt by the experiment. Before the trial began, New Jersey's limits on ticket-broker prices had been some of the strictest in the nation, and brokers argued that the rules drove them underground or out of state. Under the new system, some brokers argued, consumers would benefit by making available more tickets to sold-out events through legitimate channels, thereby pushing prices lower.

The Division of Consumer Affairs does plan to begin a study of the change, but it will not start until the trial ends on April 3. By then the Legislature is likely to have voted on making it permanent.

The Assembly recently passed the bill, 53 to 19, and the Senate will follow suit soon, legislators predict. The main sponsors of the bill, Assemblyman Walter J. Kavanaugh, a Republican from Somerville, and Senator Robert W. Singer, a Republican from Jackson, have both said they wanted the legislation approved when the trial period ends. Otherwise, they said, the prior restrictions on brokers will resume.

The brokers acknowledge that they have lobbied intensely. They say they have made many contributions to state lawmakers, including $5,000 to each of the two main sponsors, whom they honored as ''legislators of the year'' at a dinner last September. They are also trying to get similar legislation allowing unlimited brokers' fees in New York and Connecticut.

Consumer advocates and members of the state's entertainment industry are concerned that the New Jersey bill has moved too fast. ''It's an attempt to get a law passed on a fast track without due process,'' said John Scher, president of Metropolitan Entertainment of Montclair, a concert promoter. He maintains that the brokers are taking millions of dollars away from consumers, performers, sports teams and businesses like his own. ''I don't think the legislators understand what they are doing to the common person.''

Although there has been no formal study of how the new system is working, members of a consumer group, New Jersey Citizen Action, said they have found that brokers now regularly charge more than two or three times the box office price for sold-out events, and that one asked $250 for an $18 ticket to a basketball game between Seton Hall University and the University of Connecticut.

''The sky is the limit,'' Phyllis Salowe-Kaye, executive director of Citizen Action, said, ''and the licensed brokers are reaching for the moon.''

But the ticket brokers maintain that New Jerseyans now pay less overall for tickets than when the law limited them to adding no more than $3 or 20 percent, whichever was greater, to the price. The brokers say the strict limits had created excessive black market prices.

''This is good for consumers,'' said Barry E. Lefkowitz, executive director of the East Coast Ticket Brokers Association, a group that was formed about three years ago to lobby for state legislation like the New Jersey bill.

Mr. Lefkowitz said most of the brokers who had been selling tickets illegally on the black market had now been licensed by the state. That helps consumers, he said, because, if there is a problem, a ticket holder can now call the broker's office, whereas street scalpers disappear as soon as the sale is made. It is illegal to resell tickets without a license and each broker must have an office and purchase a bond.

Senator Singer and Assemblyman Kavanaugh both said the dinner and campaign contributions had not influenced them to sponsor the bill. Instead, they said, they believed the new law would protect ticket buyers, who at times had been sold counterfeit tickets by scalpers. And they said consumers could still choose to buy their tickets from Ticketmaster, a company that the state does not classify as a ticket broker since it handles large volumes of tickets and charges only a small handling fee.

If the Senate approves the bill as expected, Gov. Christine Todd Whitman -- who has free access to a luxury box at the Continental Airlines Arena, which is run by a state authority -- will soon find the bill on her desk for the second time.

In July 1995, when the Legislature first passed a bill to repeal the 12-year-old limits on brokers' prices, Governor Whitman said that she would only agree to an 18-month test, and she asked that Consumer Affairs study the effect.

While the Governor will not comment on any legislation before it is passed by both houses, Pete McDonough, her press secretary, hinted that she might wait for the study before she makes her decision. ''The Governor looks forward to the results of the study to see whose claims are right,'' Mr. McDonough said.

About 10 brokers were licensed to sell tickets in New Jersey in 1995, but dozens more have applied for licenses since the unlimited-prices test began.

The brokers say that the added competition has helped to make more tickets available to sold-out events at reasonable prices. But those who are opposed to the new system say just the opposite.

Mr. Scher said, ''Ticket brokers scheme and scam, and do anything they can to get tickets out of the general distribution and into their hands.''

The brokers have been known to get tickets by ''bringing a van load of thugs to break up a line,'' Mr. Scher said, or by ''paying off operators at Ticketmaster.''

Mr. Lefkowitz said the brokers did not use thugs or pay bribes, but he admitted that some brokers paid people to stand in line and buy blocks of tickets. A spokeswoman at Ticketmaster said the company had controls in place to insure that people calling in phone orders could not get more tickets than they were allowed.

In New York and Connecticut, brokers are already asking lawmakers for a free market similar to that proposed in New Jersey. The two states and New Jersey are among only a handful of states that have tried to eliminate scalping by setting limits on ticket prices.

In New York, brokers can charge an extra 10 percent or $5, whichever is greater. That law expires in June. In Connecticut, brokers can add no more than $3 to a ticket price.

Mr. Lefkowitz said the East Coast Ticket Brokers Association was created in part to explain to legislators and the public that ticket brokers were legitimate small businesses. ''A lot of brokers were sick and tired of people thinking they were slimeballs,'' Mr. Lefkowitz said.

But the brokers' image apparently still needs polishing among some Trenton lawmakers.

''They buy a piece of paper and sell it for a 1,000 percent profit,'' said Charles K. Zisa, a Democratic Assemblyman from Hackensack who voted against the bill. ''We've legalized what has always been offensive.''